Android, China Rise in Smartphones

NEW YORK – Nearly 300 million smartphones shipped worldwide during the second quarter of 2014, with Android OS capturing a record of 85% market share. China-based brands now make up three of the six top players.

"Global smartphone shipments grew 27 percent annually from 233 million units in Q2 2013 to 295.2 million in Q2 2014," said Linda Sui, director at consulting firm Strategy Analytics. "Global smartphone growth in the current quarter is at its lowest level for five years, and there are wide variations by region. For example, Africa and Asia are booming, while North America and Europe are maturing."

Following this trend, Huawei, Lenovo, and Xiaomi showed improved shipments with Huawei reaching 6.8% of the smartphone market and Xiaomi taking 5.4%. Strategy Analytics director Woody Oh called Xiaomi "the star performer" for rising to fifth place among smartphone leaders for the first time.

"Xiaomi's Android smartphone models are wildly popular in the Chinese market and it [sells] millions of them every quarter through its extensive online and operator channels," he said. "Xiaomi's next step is to target the international market in Asia and Europe, where it will have to invest big money to familiarize western consumers with its unfamiliar brand name."

Huawei, meanwhile, shipped 34.27 million smartphones for a 62% year-over-year growth rate. Officials attribute the company's third place among handset vendors to its Ascend smartphone series with LTE, which have led to "success in the mid-to high-end market."

While Samsung dominated the smartphone market with 74.5 million units this quarter, Strategy Analytics analysts noted a slight drop in shipments from 2013. The company faces tough competition from Apple in higher-tier phones and from Huawei at the lower end. Should Chinese companies and other Android-based devices continue to sell well, the OS paradigm could change completely.

Strategy Analytics executive director Neil Mawston said:

Like the PC market, Android is on the verge of turning smartphone platforms into a one-horse race. Its low-cost services and user-friendly software remain wildly attractive to hardware makers, operators and consumers worldwide. Rival OS vendors are going to have to do something revolutionary to overturn Android's huge lead in smartphone shipments. Apple's push into the big-screen phablet market and Firefox's expansion into the ultra-low-cost smartphone market later this year are the only major threats to Android's continued growth at this stage.

Android's gain comes at the expense of every major rival platform, with BlackBerry holding on to just 1% of the global smartphone market and Apple's iOS losing one point of share due to a lack of presence in low-tier phones. Likewise, Microsoft's Windows Phone share fell 2% globally.

There isn't much for microsoft share to begin with. I don't think theirs shrink; rather, the total market size expand and Android gain more than all the others. Nonetheless, there is still 27% gain worldwide. That's interesting.

OK. We all know about China's rise. We also know about Android's momentum.

My question is how those Chiense smartphone manufacturers will genuinely take over the rest of the world. Are the Chinese vendors are sewing up the rest of the world -- India, Africa, Brazil, etc. -- too? Or are we going to see the emergence of some local Indian companies who go directly up against Chinese?

@junko That's an interesting question you might want to get an answer for us readers.

I think a new Chinese startup, OnePlus, has the potential of becoming a poster-child of a new generation of Chinese companies that will leverage not only the Chinese manufacturing scalability, but also the fledgling industrial design talent pool, to compete head-to-head against Western incumbents.

Their very first product, the OnePlus One, sells like crazy among Android fans all over the world. The only thing hampers them now is their own lack of production capacity.

You may want to interview the OnePlus team to find out what their vision is.

Hi Junko, interesting thought India Africa etc. me thinks India's preference to be a service provider rather than a manufacturer might stand in the way. For Africa and Brazil the momentum the chinese and Americans have will make it difficult for them to get traction in time before their markt matures I think. I guess I might find myself sitting on a fence in a couple of years eating my words :-) who knows.